Talking Shop

By Claudia Dreifus

Published: April 6, 1997

Once upon a retailing time -- 50, 100 years ago -- the great merchant princes came from enterprising Jewish-American families, and they were elegant showmen bringing new ideas to the more insulated corners of America. In today's global economy, store owners often come from abroad, and they remain entertainers. The modern-day shop is a happening. The contemporary merchant is at once a salesman, an impresario and a restaurateur.

Here, three 1990's retailers -- Stanley Marcus, who was chairman of Neiman Marcus for 25 years and is still a consultant to retailers worldwide; Ingvar Kampard, the founder of Ikea, and Richard Branson, the balloon-traveling force behind the Virgin empire -- talk about how they sell by putting on a show.

Interestingly, two of these merchants -- Marcus and Kampard -- do a lot of their own shopping at Britain's Marks & Spencer, possibly the least entertaining store on the planet. Why? ''They give good value,'' Kampard says quaintly.

Q: Your family has been in merchandising for more than a century. How would you characterize the state of retailing as we move toward the millennium?

A: It seems to me that the department store is in serious trouble. I'm talking about the rank-and-file stores, with Macy's and Bloomingdale's being something of an exception.

The department store was a product of the 19th century and became a very important institution as America went into the 20th century. It provided show places in developing towns like Terre Haute, Sacramento and Dallas. It was at the department store where people got away from provincialism. But today, they are beset by all sorts of competition -- catalogues, the Internet, discounters and highly specialized stores, like Toys ''R'' Us.

Around the 60's, the department stores began to be run by controllers, who were looking at every department in terms of profitability. And they said, ''We can't make any money on refrigerators or stoves -- let's get rid of 'em.''And they did. They did the same thing with electronics. The one classification of merchandise that is the most exciting new source of invention, they got out of. It's my contention that there are some things you have to carry even if you don't make any money on them.

I'd like to put together a think tank of people -- economists, futurists, city planners, a few department-store people -- to discuss reinventing the department store. I have some ideas of my own. For instance, I think that the department store of the future will have to have some kind of entertainment. It will have to develop a way of selling goods at lower markups. But I don't know if it's absolutely necessary for them to meet the discounters' prices -- so long as they offer the public better service and a more tasteful assortment.

Q: An entertaining store -- what would that be like?

A: I think food. A variety of food experiences at a variety of prices. And stores may very well present live entertainment. Outside New York, where there's less live entertainment, I could see stores having on-site concerts, offbeat performances that take advantage of the local idiom of expression. Exhibitions are also key -- like showing the origin of design through merchandising. For instance, I'm wearing a houndstooth-check tie. What is its origin? I think people would have a great interest in seeing how fashion originates and how things are made. In Japanese department stores, they dedicate one floor to an art gallery. Or you could have demonstrations of glassmaking or flower arranging, or an exhibition of the drawings of Frank Lloyd Wright.

Q: So what you're saying is that stores could become more like museums, while museums seem to be becoming more like stores?

A: Yes. I was in the Metropolitan recently, and I was flabbergasted when I saw the size of their store. They are selling everything from rugs to jewelry.

Q: Which stores do you see doing great merchandising?

A: Marks & Spencer. Because as Sir Marcus Seif himself says, they are ''obsessed with merchandise.'' They are constantly looking for things that are newer and better. I also like what Jean-Louis Dumas does at Hermes, and Gordon Segal of Crate and Barrel. They're making a real strong attempt to lead the market to a higher plateau. Whenever you set a taste standard, you are being presumptuous, and these merchants dare to be that.

Q: If you were to redesign the suburban mall, what would it look like?

A: It would be located near where people live. A store of the next century could have imaginative vending machines, maybe designed by Disney. They'd wink at you or smile at you when you put your money in -- something to make it fun. You could sell cosmetics, underwear, slippers -- probably 30 to 40 percent of department-store stock -- in a vending machine. The machines would make many salespersons obsolete, and that would bring down the markup.

Q: Where do you shop for yourself?

A: At Neiman Marcus. I get a 30 percent discount. I also go to Sears twice a year, to see what's happening there. And I always learn something.

Ingvar Kampard, 70. Founder and chairman of the Ikea Group, with 134 stores in 28 countries.